Minister for Agriculture Charlie McConalogue is to meet semi-State forestry company Coillte to discuss its tie-up with a British investment fund to finance new forestry investment in Ireland.
Gresham House, specialist asset managers working with Coillte, have established the Irish Strategic Forestry Fund, which aims to assemble a €200 million fund to create new forests and buy some existing forestry.
Coillte will source the land for the fund and carry out the planting and management of the forests, while the fund will benefit from forestry grants and premia.
Minister McConalogue was in Limerick to address an Irish Farmers Association farming and climate summit, attended by over 400 delegates.
Opposition TDs and farming organisations, including the IFA, have expressed fears that the new fund will price farmers out of the land market.
IFA Forestry Chair Jason Fleming said the focus of the State should be on farmers doing the forestry planting.
"The economic benefits when an investor plants or buys existing forests is significantly less as the majority of the money leave the local economy," he said.
"With already strong demand in the agricultural land market and limited supply, the new Irish Strategic Forestry Fund is likely to further increase the competition for land, which will result in more farmers being priced out of the market and unable to expand operations to future proof their businesses."
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
Coillte, which already has a plan to create 100,000 hectares of new forestry by 2050, says it cannot meet the scale of investment required to do so and investment by Gresham House is needed.
The company needs to reach a planting rate of 3,000 hectares per year, but will only plant 400ha in 2023.
It disputes claims that the price of land will be driven up.
A company statement said: "Coillte believes the fund will not have an effect on overall land prices in Ireland.It is not our intention to drive up land prices or in our interests to do so."
The introduction of the Gresham House forestry fund was criticised at the Oireachtas Committee on Agriculture before Christmas, with committee chairman Jackie Cahill saying the matter would be raised again before the committee soon.
Committee member and Sinn Féin's agriculture spokesperson Matt Carthy called for the introduction of the fund to be delayed.
"What amounts to a massive sell off of state lands to foreign investors is the product of the Government's failure to deliver on forestry and the price will be borne in local economies, communities and the environment," he said.
"A good forestry strategy is one that delivers for the environment, for local communities and for the economy.
"Coillte's proposed joint venture will deliver none of these."
The Gresham House fund already has an investment of €25 million in place from the Ireland Strategic Investment Fund, which invests tax payers' money on a commercial basis and is owned by the National Treasury Management Agency.
